Is the New PayPal Chief -- the Zong Guy -- About to Screw up eBay?

The best part of eBay (EBAY) is PayPal. When eBay’s revenues increased 27% to $11.7 billion last year, it attributed that primarily to a 29% increase in PayPal net total payment revenue.

The company’s Payments division, dominated by PayPal, brought in $4.1 billion in revenues, up 26%. By contrast, the Marketplaces division (read: auctions), brought in $5.4 billion, up 13%.

While companies like Facebook struggle to figure out how to tackle a world where people depend more and more on smartphones, PayPal is thriving. Originally an online payment business, it’s only becoming more popular in a mobile world, where a corner grocer can whip out a phone and use PayPal to ring up a transaction.
PayPal’s also a beneficiary of merchant anger at Visa (V) and Mastercard (MA). PayPal just struck a deal with Discover (DFS), making card-less checkout available at stores that accept Discover cards. Major retailers are testing PayPal’s point-of-sale service.

So how does eBay respond to this success? With a complete overhaul, apparently. eBay bought mobile payments startup Zong last year for $240 million. It put Zong’s David Marcus in charge of PayPal, despite the fact he’s never managed a company anywhere close to the size of PayPal. And according to the latest Bloomberg Businessweek, Marcus started by telling employees to forget everything they knew about PayPal.

PayPal has competitors including Square, which has a partnership with Starbucks (SBUX). Businessweek also mentions Visa, Google (GOOG) and a startup called Stripe. And no-one argues against staying nimble.

But you don’t want to forget everything you know if it has helped create this kind of
revenue growth.